Friday, October 14, 2011
The current movie “Moneyball” celebrates the way general manager Billy Beane selected and developed baseball players for the Oakland As. Is there a lesson here for law firms? According to a recent article, law firms often rely on the wrong criteria for hiring and developing new lawyers. The focus should be return on investment. Law firms may be mistaken in overly focusing on law school grades and other traditional indicia:
Consider grades, law firms' primary filtering device when making hiring decisions. It turns out that grades (like home runs in baseball) do matter for success, but that there are other Moneyball factors that typically matter more and, as suspected, some that matter less. When a firm focuses excessively on grades—which only explain a small fraction of associate performance—it often systematically overlooks better performing candidates.
What are the factors beyond grades that are positively correlated to success at firms? The answer depends on the firm. In some Am Law 100 firms, lawyers with blue and pink collar work experience tend to be among the top performers. While at other Am Law 100 firms in the same profit bracket, associates with blue and pink collar backgrounds tend to underperform. Similarly, with educational credentials, JD-MBAs have thrived at one firm, but at another competing firm only a Masters or Ph.D. in a science or technical field is correlated with success. Performance of homegrown versus lateral associates varies by firm. There are also "non-factors" at many firms that don’t rank as positive or negative predictors of success, including participation in moot court, mock trial competitions.
According to the article, which factors merit the most attention depend on the personality and culture of the firm. As for evaluating lawyers, good grades should go to those who engage in proactive client and team focused behavior that delivers value to clients in excess of costs—giving clients good value is the way to attract and maintain them.